French Political Scandal Threatens Chirac

Sacre Bleu!

PARIS - In Paris they're calling it the French Watergate. What began as a discreet investigation into a computerized list of secret bank accounts has exploded into major scandal that threatens to disgrace President Jacques Chirac at the end of his long political career.

A CD-ROM sent to an investigative judge listed Interior Minister Nicolas Sarkozy among industrialists, secret agents and politicians holding accounts at Luxembourg bank Clearstream, flush with kickback money from the $2.8 million sale of French frigates to Taiwan in 1991.

The list turned out to be fake, embarrassing Prime Minister Dominique de Villepin, who ordered an investigation into the allegations.

Villepin is fending off demands for his resignation and allegations that the whole thing was a scheme to discredit Sarkozy, his chief rival for the governing party's presidential nomination in elections next year.

Now politicians are demanding that Chirac — who is widely believed to support Villepin for the nomination — break his silence over the scandal and answer questions over his own alleged role. This president's office insists he had little to do with it. But last week, Le Monde newspaper published extracts of testimony from an intelligence agent who said Villepin asked him to investigate Sarkozy on Chirac's orders.